• The Fiat Backdrop
• Rent-Seeking, Not Productivity, Is What Gets Rewarded
• The Numbers on the Table
• Who’s Really Footing the Bill?
• Where This Goes

SpaceX is set to begin trading today, June 12, 2026, at a price that implies a $1.75 trillion valuation the largest IPO the stock market has ever seen. With a wave of other AI-adjacent companies expected to follow in the back half of the year, the valuations being thrown around have left me genuinely dizzy.

To be clear, I’m not an AI doomer or a Luddite. I think AI has enormous potential and could meaningfully change how we live and work, however potential and present reality are two different things, especially once you’re talking about where capital actually flows.

§The Fiat Backdrop

Thanks to the fiat monetary system, we’ve built an economy that’s drifted far from anything resembling organic price discovery. It runs primarily on rent-seeking businesses and the steady drip of newly printed money. The most accurate label I can put on the current arrangement is “state-directed capitalism” or a form of corporatism where the state and big business become one (also affectionately known as fascism). I know “state-directed” and “capitalism” don’t belong in the same sentence, but bear with me.

Most major industries and companies as we know them wouldn’t exist in their current form without government subsidies, govt grants, the Federal Reserve’s quantitative easing programs, and government contracts. We used to call heavy state involvement in industry socialism but apparently it’s the in thing now. Layer the stock market on top of that, and you get a system that performs the appearance of decentralized capital allocation and genuine price discovery while functioning quite differently underneath.

The Silicon Valley playbook of spot a startup, fund it through seed and growth rounds, ride it to IPO; has become part of the machinery through which Fed-driven liquidity gets routed, via “private” intermediaries, toward companies that align with whatever the state’s current priorities happen to be. That’s not to say genuine outliers don’t exist but if you really think about it, projects like WikiLeaks, Signal, or Bitcoin would never get funding from Silicon Valley VCs without significant compromise or redirection away from their original missions, which are very much antagonistic to those of the powers that be.

PayPal is a classic example of this, where in its early days it set out with the explicit goal of displacing the US dollar, and that ambition was steadily diluted with each funding round until the company became something else entirely. (Their technical approach probably wouldn’t have gotten them there anyway, but the broader pattern still holds.)

§Rent-Seeking, Not Productivity, Is What Gets Rewarded

In a functioning profit-and-loss system, losses are a signal, as they tell you that what you’re producing isn’t worth what it costs to produce it, and the market eventually corrects through business failure or genuine innovation-driven, cost reduction. That signal has been badly distorted by state intervention in the market through central bank money printing, regulatory protection for state aligned companies and taxation

The Cantillon Effect explains why this matters because when the money taps are running, a competition kicks off, not a competition to build things people actually want at prices they’re willing to pay, but a competition for proximity to the newly printed money itself. Touting future products that never quite arrive, cultivating political relationships, and taking high-profile cultural positions all become more valuable skills than running a profitable business.

An example that immediately comes to mind would be Cathie Wood’s ARK funds, which have collectively destroyed roughly $13 billion of investor capital while collecting close to $1 billion in fees , with $16 billion still under management, because the story is more compelling than the numbers. Carvana, despite well-documented and largely undisputed fraud , still carries an $80 billion market cap and has minted several new billionaires.

Anthropic’s ceo, Dario Amodei, also recently embodied this rent-seeking dynamic a few days ago when he penned an 8 000 word open letter to Uncle Sam basically demanding for more regulatory oversight over AI. Whilst to the untrained eye this seems responsible, the truth of the matter is that it’s slow regulatory capture happening before our eyes.

None of this looks like failure in the conventional sense, because personal wealth has become increasingly detached from the profit-and-loss system that’s supposed to discipline it. The insanely high valuations or AUM become part of the story of convincing you that these companies are run by masters of the universe, who know best and whose judgements should never be scrutinized, in a market where price signals have been destroyed by the money printer go brrrr phenomenon. That detachment is the lens through which the SpaceX IPO needs to be read.

§The Numbers on the Table

SpaceX priced its IPO at roughly $135 a share, implying a $1.75 trillion valuation against revenue that’s a small fraction of that figure and against a reported $5 billion loss in 2025 alone. The target raise is around $75 billion, with a meaningful portion reserved for retail investors, reportedly including a dedicated event for around 1,500 retail participants ahead of pricing.

While the underlying mission, making humanity multiplanetary, building out Starlink, and now folding in the xAI/Grok/Colossus stack; is genuinely ambitious, SpaceX still fits the pattern of a company that, in its current form and at this scale, wouldn’t exist without deep state involvement, from NASA contracts, Department of Defense launches, to now AI infrastructure being framed as a matter of national security.

At this valuation, SpaceX would debut as one of the largest companies in the US market, ahead of Tesla’s market cap. That places an enormous amount of expectation on milestones; Starship’s full reusability, Mars ambitions, Starlink’s profitability, and whatever AI economics get bolted on that haven’t yet been demonstrated at scale. The bull case for the stock leans heavily on mechanics: a small free float, the prospect of index inclusion forcing passive funds to buy in, and sheer global demand outstripping available shares. The bear case is more straightforward, you’re paying a price today for outcomes that haven’t shown up in the numbers yet, and the first real read on the underlying fundamentals won’t come until the first quarterly report, expected sometime in the fall.

To me, that gap between price and demonstrated fundamentals looks like a valuation built substantially on AI-driven hype and narrative, with the profit-and-loss reality, while the staggering infrastructure spend required to make the AI applications we hear about in the press actually materialize, is pushed to the background.

§Who’s Really Footing the Bill?

This raises a deeper question than “will SpaceX succeed.” It’s a question about what real value even means in an economy this distorted by rent-seeking and state direction. Is a $1.75 trillion valuation a reflection of underlying reality, or is it irrational exuberance in a SpaceX suit?

Here’s a thought experiment, if you held 10 Bitcoin and had the option to put it into this IPO, would you do it or would you hold the Bitcoin? Now ask yourself the same question about Anthropic or OpenAI when their turn comes. The opportunity cost is the same.

In today’s fiat-driven economy, finding businesses that grow because they’re meeting genuine market demand at profitable price points has become the exception rather than the rule. Burning capital while sucking on the state’s teat has, in many corners, become the dominant strategy. With AI now formally designated a “national security priority,” it’s worth asking, is there any realistic path back to capital allocation and price discovery that isn’t shaped by state intervention? When you pay your $20-a-month AI subscription, are you actually covering the cost of what you’re using or is the real check being written by Uncle Sam? If the latter is true then the actual customer these companies are serving is not you but the state.

§Where This Goes

The largest IPO in history may well be the opening act of the largest bubble in history. Retail investors, some informed, many not, and plenty driven by fomo are likely to pour money in directly or indirectly through their pension funds and index exposure. This speculation-fueled run could keep building as Anthropic and OpenAI eventually make their own moves toward public markets, and when it finally turns, the unwind won’t be gentle.

It probably won’t happen immediately, but when growth or revenue milestones inevitably come in short of the narrative that justified these valuations, a market correction will provide a convenient explanation; a scapegoat that lets the underlying overpromising go unexamined.

I genuinely hope I’m wrong about all of this, and don’t take my word for it, do your own research. If you do end up investing in any of these companies, I wish you the best.